Merrill Lynch of the US has confirmed that it has been appointed by Tunisia to lead-manage the country's $400 million debut issue in the US domestic market. Goldman Sachs and Morgan Stanley are co-lead managers for the Yankee issue later this year, which is the first of a swathe of bonds expected from Arab governments between now and the end of the year.

Tunisia has been an active issuer of international bonds since 1994, though until now it has preferred the Japanese market. It sold

Y 12,500 million ($108 million) worth of bonds earlier this month in an issue lead-managed by Nikko Securities. That issue had a 20-year maturity - the longest yet achieved by the Tunisian government, and a coupon of 4.35 per cent compared to the 4.95 per cent coupon on its previous yen issue. Nikko says the sale went well despite competition from a Greek Samurai bond issued at the same time, with the same credit rating.

The next Arab issue onto the block may be the debut Eurobond issue from Egypt, expected to be for around $250 million. The government says it has not yet decided who will lead the issue, but investment bankers have been flocking to Cairo to plead their case and several have offered their services at low or no cost to advise the government on credit ratings in a bid to win favour.

Lebanon is also due to issue to refinance its maturing 1994 bonds - Prime Minister Rafiq Hariri has asked parliament for permission to issue a total of $1,000 million worth of bonds. Omani officials say their government may follow up its $225 million sovereign Eurobond with a new issue, and while Jordan is expected to launch its debut Eurobond in the wake of the successful $100 million sale of five-year bonds by the Jordan Phosphate Mines Company.